What A Virus Can Do To An Economy


BETTER DAYS

Sen. Sonny Angara

Senator Sonny Angara has been in public service for 15 years—9 years as Representative of the Lone District of Aurora, and 6 as Senator. He has authored and sponsored more than 200 laws. He recently won another term in the Senate.

Email: sensonnyangara@yahoo.com| Facebook, Twitter & Instagram: @sonnyangara


A virus hurts the human body by interfering with normal functions, effectively sickening the person. But just as COVID-19 is demonstrating, a virus can affect economies as well. Indeed, the MIT Technology Review website has called this outbreak an “infodemic,” where an overabundance of information—both fake and real—have far-reaching consequences that can affect whole countries and populations on many levels.

Here in our country, we have been relatively fortunate so far. While it’s true that manufacturing figures based on the purchasing manager’s index hit a 13-month high this February, with growth in new orders, exports, and hiring, we should also pay heed that COVID-19 is affecting us already.

Tourism is a serious concern. Boracay, one of the country’s tourist hotspots, has had a 40% decline in arrivals, from 172,695 visitors in January, to 103,834 in February. This development has closed 20 establishments on the island and in the airport, in all, and has displaced 378 workers. In Baguio, farmers will receive government assistance through the Department of Agriculture, as the suspension of festivals and similar events have triggered a drop in the sales of highland vegetables. Hotels, restaurants, and resorts have likewise not ordered as much food for their guests. The same has happened in the towns of Bayambang and Calasiao in Pangasinan.

Of course, there is the issue of Philippine Airlines retrenching 300 employees.

When it comes to the industrial sector, London-based Capital Economics has pointed out that the Philippines would be vulnerable to supply chain disruptions due to factory shutdowns in China. For example, 47% of the imported manufacturing input used by local metal fabricators come from China. Textiles, apparel, paper, printing, rubber and plastic are other materials that can also be affected. This is because China was one of the top import and export partners of the Philippines in 2019. Vehicle sales, such as those for Hyundai, were affected by demand and supply chain disruptions, with demand dropping from 2,825 units in January, to 2,045 a month later. Zamboanga City has been negatively affected, with the city’s local aquaculture industry, hotels, and restaurants suffering from the outbreak’s effects. When it comes to our industries, the fact that we import from and export to China materials and products makes our economy sensitive to the disruption that the coronavirus is creating in China.

Finally, the COVID-19 outbreak also affects our overseas foreign workers. The Department of Foreign Affairs are already repatriating our countrymen who were let go from their jobs in Hong Kong due to fears about the coronavirus. Our own government is also looking to scale back OFW deployment to Kuwait. This is because Kuwait has new medical measures in place to confirm if foreign workers entering their country are free from the coronavirus. With all this happening, ANZ Research which provides insights on regional economies has said that OFW remittances may be affected as well, given that many OFWs may be laid off, and that deployment may also shrink.

Given how the effects of the COVID-19 coronavirus outbreak is affecting so many sectors in our country, I feel that we need to survey exactly who and what are being affected by this potential pandemic in our country. This is why I urged that the Department of Labor and Employment conduct a survey of all companies who are letting go of workers due to COVID-19. But given how many are being affected, perhaps the Department of Trade and Industry, the Department of Tourism, the Philippine Overseas Employment Administration, and, of course, the Department of Health should also be involved in gathering information.

This is the opportunity that COVID-19 presents us with: to come up with protocols based on collected data about country-wide disruptions to minimize their effects on various industries in our country. That way government interventions can be properly prioritized and strategically implemented.

Just as we have to use masks when we are sick, and wash our hands properly after touching possibly contaminated surfaces, so, too, should we have guidelines to keep our economy – our industrial and labor sectors – healthy and functional even in the middle of a crisis.

Rate this post